What is ABN.AS's Intrinsic value?

ABN Amro Bank NV (ABN.AS) Intrinsic Value Analysis

Executive Summary

As of June 8, 2025, ABN Amro Bank NV's estimated intrinsic value ranges from $19.31 to $23.22 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $23.22 +0.3%
Dividend Discount Model (Stable) $19.31 -16.5%

Is ABN Amro Bank NV (ABN.AS) undervalued or overvalued?

With the current market price at $23.14, the stock appears to be fairly valued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate ABN Amro Bank NV's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 2.6% 3.1%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.66 1.96
Cost of equity 11.0% 15.5%
Cost of debt 5.0% 5.0%
Tax rate 27.4% 30.9%
Debt/Equity ratio 4.85 4.85
After-tax WACC 4.9% 5.5%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 53.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 13.3%
  • Long-term growth rate: 0.5%
  • Fair value: $23.22 (0.3% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 15.5% (Low) to 11.0% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $13 to $26
  • Selected fair value: $19.31 (-16.5% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $18935M
Enterprise Value $118565M
Trailing P/E 8.07
Forward P/E 7.41
Trailing EV/EBITDA 0.00
Current Dividend Yield 656.98%
Dividend Growth Rate (5Y) 0.22%
Debt-to-Equity Ratio 4.85

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Dividend Discount Model (Multi-Stage) 57% $4.64
Dividend Discount Model (Stable) 43% $2.90
Weighted Average 100% $21.54

Investment Conclusion

Based on our comprehensive valuation analysis, ABN Amro Bank NV's weighted average intrinsic value is $21.54, which is approximately 6.9% below the current market price of $23.14.

Key investment considerations:

  • Historical dividend growth of 0.22%

Given these factors, we believe ABN Amro Bank NV is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.